@TechReport{dp-510,
author = {Koenig, Tobias and Lausen, Tobias},
astring = {Tobias Koenig and Tobias Lausen},
title = {Relative Consumption, Optimal Taxation and Public
Provision of Private Goods},
month = {February},
year = {2013},
pages = {28},
size = {232},
number = {510},
language = {en},
keywords = {Public Provision, Social Preferences, Status, Optimal
Taxation},
jelclass = {H42, D62},
abstract = {This paper shows that public provision of private goods
may be justified on pure efficiency grounds in an
environment where individuals have relative consumption
concerns. By providing private goods, governments directly
intervene in the consumption structure, thereby having an
instrument to correct for the excessive consumption of
positional goods. We identify sufficient conditions where
public provision of private goods is always part of the
optimal policy mix, even when consumption taxes are
available. In fact, with public provision of private goods,
there are cases where the first-best allocation can be
achieved, and (linear) consumption taxes can be
redundant.}
}